This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article.

October 12, 2012

Five Surprising Insurance Benefits for HNW Families

Very few people read their insurance policies or have the patience to let their agent explain all the features of their insurance program until they suffer a loss. As a result, they never learn about many benefits, especially if they are insured by one of the few carriers that cater to high-net-worth (HNW) clients. Because the complexity of risk often rises along with assets, these companies offer as part of their insurance program a wide range of complimentary services and specialty coverages to help HNW families prevent, minimize, and recover from loss. Here are just a few that might surprise them.

Background screening. HNW clients often employ domestic staff such as nannies, housekeepers or drivers. While most domestic employees are trustworthy, some will use their access to the home and family to do harm. They might steal property or sensitive information, kidnap or threaten children, and file frivolous lawsuits for discrimination or sexual harassment. To address this threat and potential loss, carriers such as ACE Private Risk Services offer clients access to security firms that can conduct background screens of domestic staff and contractors who work on the home.

Identity theft prevention and resolution services. The average family faces a one in ten chance of being a victim of identity fraud, and having substantial assets may raise the risk simply because you are a more lucrative and visible target. Meanwhile, modern technology and social media have opened new avenues for personal information to be exposed. To help combat this risk and potential loss, carriers such as ACE frequently offer complimentary access to robust personal identity management services. These services can monitor social media sites’ privacy policies, help remove or bury damaging information, recover important documents after fires or floods, resolve issues related to identity fraud and more.

Preventative measures. The best homeowners policies will reimburse clients for protecting their property when it is in imminent danger. For instance, if a hurricane is predicted to strike a home, the owner may want to have the windows boarded up, the garage door braced and precious artwork moved to windowless rooms or evacuated to a safe storage facility. Reasonable expenses for these measures would be reimbursed. In addition, if a large tree branch fell in a storm and knocked a hole in the roof, many policies will cover reasonable expenses for temporarily patching the roof to minimize further damage. Such coverage makes good sense, since preventing or minimizing damage represents a win for both the homeowner and company. Nevertheless, many people hesitate to act before they get authorization from the company. By then it may be too late.

Medical expenses and voluntary payments. In many cases, quick action helps minimize the cost of repairs or treatment and also prevents costly lawsuits. Therefore, if your snowboarding teenage son accidentally knocks over an elderly skier, you can encourage the elderly skier to get any injuries examined immediately at your expense, knowing that your insurance will reimburse you. Most policies will cover up to $1,000 in expenses. Policies such as ACE’s that are geared to HNW clients can go as high as $50,000 for medical expenses. Similarly, if a tree on your property falls on your neighbor’s home, it is generally considered an act of God and not your fault. The neighbor would have to file a claim with his insurance company, perhaps causing his rates to go up or sue you for negligence if he thought the tree was unhealthy. To help maintain good relations and prevent costly litigation, the best insurance policies will cover your expenses for repairing the neighbor’s home up to $10,000.

Annual insurance checkup with agent. Perhaps the most important benefit of all is the advice and counsel of your insurance agent or broker. The best agents will have a routine for reaching out to clients every one to three years to thoroughly review their situations and make sure their insurance policies address potential risks. This might mean adjusting the amount of coverage for jewelry due to the dramatic increase in the price of gold, or adding director’s and officer’s liability coverage because a client recently volunteered to serve on the board of a charitable organization. Or it could mean making sure a client getting premium credits for recently upgrading the electrical system in your home. By all means, clients should take advantage of this process when it is offered, and if the agent hasn’t been calling or sending a letter for a check-up, call him—or look for a new agent.